A. Problem Analysis

1. What was the problem before the implementation of the initiative?

- Nong Ya Sai is a district in Suphaburi characterized by drought and infertile soil so it was called “Isan Suphanburi” meaning the land is as drought and infertile as the most drought region of Thailand –The northeastern. Most population of the district was farmers. Since their incomes are dependent on their crops, drought brought bad crops year after year. So farmers here were very poor. The only financial institution in the district was the Bank for Agriculture and Agricultural Cooperative (BAAC).
- Nong Ya Sai Agricultural Cooperative Limited (NYSAC) registered as an agricultural cooperative in 1986 with initial members of 374 and 95,600 baht (USD 2,731) share capital. Since its establishment, the cooperative had continually grown by size. Its memberships have increased from 374 to over 2,000 including farmers in all 6 sub-districts of Nong Ya Sai district, so as its problems. As all of its members were poor lacking of capital for their farming operation and household consumption, NYSAC extended loan to help its members. However, NYSAC accumulated bad debts went because its members lack ability to payback their loans. Year after year of loss, its capital reserve depleted, and liquidity lost, NYSAC were almost non-functioning cooperative. Bankruptcy seemed inevitable.
- In later years, its BoDs and managers spent more than half of their time go to court suing against its members. In many occasions, NYSAC’s members had to take a ride with the coop’s BoD, manage, and CPD officials to court because they couldn’t afford their own transportation.
- CPD is a government organization whose roles as cooperative regulator and promoter were to ensure that cooperatives registered under Thai Cooperative Law conformed to the law and strive to grow as a farmers’ organization where self-help and mutual help principles were upheld and practiced and small farmers can achieve financial and social stability.
- One lawsuit after another and time after time of seize of assets, both CPD officials and NYSAC’s BoD and manager came to realize that the cooperative had failed tremendously to be what it’s supposed to be – a good farmers’ organization - it, instead had become an institution against its own member farmers.
- CPD official realized that NYSAC was in urgent need of a revitalized plan otherwise cooperative would have to go down the dissolution path in a short time and almost 3,000 farmers and their family would be left to struggle on their own, with little to no chance of getting credit from any other financial institutions. They would have to rely on super high interest credit from non-institutional source (loan shark) and never earn enough to pay their debt out of poverty. So they discussed a plan solve the cooperative problem in a different way.

B. Strategic Approach

2. What was the solution?

- CPD initiated a process to deliver more flexible and effective extension service that help vulnerable cooperatives to adopt and internalize more easily. The process facilitated cooperatives to participate in designing CPD’s extension service to meet their needs taking into account their specific circumstances and constraints and also enabling monitoring visibility.

3. How did the initiative solve the problem and improve people’s lives?

- Since the NYSAC problems rooted in its members’ ability to pay back the coop’s loans which overtime reduced its liquidity as well as overall performance and capacity to service its members. So the initiative aimed at fixing NYSAC’s members’ financial problems by helping them reducing debts and expenses, increasing incomes and started saving so got out of absolute poverty. The Participatory Promotion Service System (PPS) worked effectively in solving Nong Ya Sai Agricultural Cooperative because it enhanced the abilities of CPD’s promotion (extension) officials as well as the NYS cooperative and its members to truly understand the coop’s problems and limitations. Then the strategic plan was laid out based on such information. And the plan worked to addressed the problems from the ground up meaning that it first solved the foundation problem – farmers’ overwhelmed debts and imbalanced inflow and outflow of money – then ensuring that farmers retain their income generating asset (lands) and lastly, increasing incomes and savings. The detailed strategy mechanism are:
o NYSAC’s strategic plan formation – derived from the participatory process through the discussion/ brainstorming sessions organized by CPD officials, participants included NYSAC’s members, BoD members, and manager. Every stakeholders learned about members’ problems – excessive debts from more than one source including NYSAC, BAAC, and loan sharks – and their limitations - low incomes, too much expenses, and unable to save money. Then NYSAC’s strategic plan was formed laying out 5 projects under 3 strategies to solve the problem by addressing each of those limitations. The 3 strategies were 1) Improving farmers’ ability to pay back loans achieved by reducing money outflows, increasing money inflows; 2) Retaining farmers’ income generating asset which was their land; and 3) Building members’ trust in NYSAC.
o The PPS helped NYSAC’s members to get out debt, improve incomes and savings and quality of life. The strategies negotiated with loan sharks to get member farmers out of unfair-super-high-interest loan contracts with loan sharks reducing their sources of credit to only BAAC (government bank for agriculture and agricultural cooperatives) able to pay back their loans - the loan pay back rate at NYSAC improved from 48% to 95.52%, 75% of farmers could buy back their land from the cooperative, members’ savings increased from 25,664.11 baht per person (USD 733.26) to 44,566.28 baht per person (USD 1,273.32) or 173.65% increase over 9 years, and saving in form of share capital increase from 15,510.28 baht per person (USD 443.15) to 21,969.33 baht person (USD 627.70) a 142% increase over 9 years.

C. Execution and Implementation

4. In which ways is the initiative creative and innovative?

- The initiative was a new process to deliver promotion service that was more flexible and align with cooperatives’ needs and constraints so that it was more effective to solve NYSAC’s operational problems. It was innovative in 3 aspects – design, implementation, and monitoring. In term of design, it was participatory as both sides of public service delivery – CPD official and NYSAC including its BoD, manager, and members – were actively engaged in developing plan to solve NYSAC’s problems as opposed to CPD’s former promotion service process that was top down and policy driven so only stronger cooperatives could carry out successfully. The implementation of the initiative was practical. It took into account the cooperative’s needs and constraints so every project was designed to facilitate the cooperative and its members’ adoption and realization. In addition, it was. Another element making the implementation of the initiative successful was the responsive monitoring process. The plan was adopted to implement in the NYSAC and CPD officials adapted it as a promotion service plan so consultation, supports, and resources were prepared and provided in line with NYSAC’s needs and timeline. In case any deviation from the plan, corrective action was taken immediately.

5. Who implemented the initiative and what is the size of the population affected by this initiative?

- CPD’s officials and NYSAC’s management were main implementing agencies. From the strategic plan designed based on members’ problems and limitations reflected from the discussions and brainstorming sessions, strategic plan to solve the NYSAC’s members’ debt problems. Implemented 3 strategies with 5 projects aiming at improving members’ ability to pay back debts so they could relieve themselves from heavy debt burden by reducing expenses and increasing incomes, retaining members’ income generating asset-land so they could continue their agricultural production to earn incomes, and lastly, building trust in NYSAC so to increase members’ participation and cooperation.
- In the implementation of theses 3 strategies, NYSAC’s management together with CPD officials arranged training courses on making household necessities such as soap, dish soap, shampoo, etc. from used for members so they could reduce expenses and earn more extra incomes. NYSAC and CPD officials also negotiated with the loan sharks to reduce and transfer members’ debts back to the coop and reset payment terms which were more applicable and fair for members.
- In addition, the NYSAC’s management and CPD officials also frequently visited members to follow up and provide consultation to members.
- The implementation of the initiative affected around 45,000 farmers from 6 sub-districts in Nong Ya Sai district who were similarly affected by bad agricultural production, low incomes, and debts.

6. How was the strategy implemented and what resources were mobilized?

- To solve NYSAC and its members’ problems, 5 projects under 3 strategies were implemented:
Strategy 1 – Improve NYSAC’s members’ Ability to Pay back Their Loans
- The 3 projects were implemented: 1) Savings towards Loan Payments, 2) Stop Debt Growth, and 3) Funds for Friends:
o Project 1 - Savings towards Loan Payments involved helping NYSAC’s members to reduce expenses, increase incomes and keep track of earnings and spending, and regularly saving for debt payment. Reducing expenses – production and household expenses – in term of production cost reduction, CPD official in cooperation with NYSAC arranged a training course to teach NYSAC’s members to make organic compost from left overs and to use organic matters to improve soil fertility so they could reduce chemical fertilizer use and cost. As for household expense reduction and income increase, we hold a training session on making household daily necessities such as soap, dish soap, shampoo, etc. that they could use and also sell to earn extra incomes. Another important activity was to help them keep track of their finances. CPD and NYSAC coordinated with Cooperative Audit Department to arrange a training course and consultation sessions on home bookkeeping so the members can understand the pattern of their expenses and incomes including their production costs so they can cut unnecessary costs. And the last activity in this project was to build and facilitate their saving habits so they incrementally accumulated money towards debt payment. Tactic used in this case was an on-site deposit system where, during a consultation visit, NYSAC or CPD official would collect the deposit from members, record it, and deliver it to NYSAC office. Through these 3 projects, members were able to save more money and improved on their debt payments.
o Project 2 – Stop Debt Growth –to help members with long overdue debts to be able to relieve themselves from exponentially growing heavy debts while being able to use their land to generate incomes. NYSAC allowed its members to use their land to pay for debts and lend it to them at low cost (estimated 1/3 of market rate). Members could buy back their land in installments within 5 years. This project helped solve long overdue debts and relieved NYSAC’s members from heavy debts.
o Project 3 – Funds for Friends - to increase liquidity for debt payment in case members unable to meet the specific due dates. An emergency fund was established from one-baht saving scheme where every member save one baht per day towards this fund so it could be used to advance for debt payment for members who were in shortage.
Strategy 2 – Help members to Retain Their Land
- Member farmers who took high interest loan from loan sharks using their land as collateral were risk losing the land because they were unable to pay back the loan. This strategy solve the problem by transferring members’ debts from loan sharks to NYSAC and reset a fair payment terms with members.
Strategy 3 – Build Members’ Trust in the Cooperative
- To improve NYSAC’s personnel ethic and establish members’ confidence in the coop therefore improve members’ participation and commitment by promoting moral and ethics in NYSAC’s personnel such as integrity through Moral and Ethics Bank Project.

7. Who were the stakeholders involved in the design of the initiative and in its implementation?

- CPD’s officials, NYSAC’s management, and its members were actively involved in the design and implementation of the initiative. In the design process, CPD officials arranged and facilitated the discussions and brainstorming of members and the coop’s managements so that members’ financial problems and limitations were reflected to NYSAC and CPD, then strategic plan was prepared incorporating those factors. During the implementation process, CPD and NYSAC’s management were implementing forces with cooperation from members. Trainings and consultations necessary for the capacity building of members so they could incomes, reduce expenses, and improve financial stability were provided by CPD and NYSAC.

8. What were the most successful outputs and why was the initiative effective?

The PPS system achieved in solving NYSAC’s long standing problems and helped its members to improve their financial health significantly. The initiative’s role in advancing the SDGDs was its achievement in relieving poverty and improving women role in household decision making.
1) Relieving farmers from excessive debts. NYSAC’s member farmers could pay back their long-overdue debts with numbers of facilitating projects such as stopping debt growth, reducing expenses, improving incomes, and fund for emergency needs for debt payment. After the initiative, farmers’ ability to pay back debts was improved as they could meet their dues better indicated by improvement in NYSAC’s on-time debt pay back rate from 48% to 95.52%. Farmers could relieved themselves from super-high interest debts from loan sharks
2) Retaining farmers’ lands. Farmers who risked losing their land ownerships to loan sharks was able to retain their land through debt transfer process where NYSAC negotiated to buy member farmers’ debts from loan sharks and also reset a payment term that was more applicable and feasible for the members so they could pay back loans and save the land.
3) Increasing farmers’ incomes and disposable incomes. By training and encouraging them to keep track of their incomes and expenses with home bookkeeping, enabling women to take part more actively in households’ financial decision, making household products from recycled to reduce expenses and extra incomes.
4) Increasing farmers’ savings. When the farmers could relieve from excessive debts, reduce expenses, and increase incomes, so they could increase their disposal incomes which reflected from their improve ability in loan repayment, 173% increased savings and 142% increased share capital.

9. What were the main obstacles encountered and how were they overcome?

- Members had low incomes so they found some difficulties to maintain regular savings. Activities to help them increase incomes and reduce expenses were implemented along with an on-site deposit system to facilitate and encourage regular savings.
- Income improving project faced with some difficulties such as lack of water supply for vegetables grown after rice season and lack of market channel for them. To solve water supply problem, CPD official advised farmers to dig up artesian well for use during dry season and also advised NYSAC to open some spaces at the coop office for use as a farmer market. CPD also helped with the PR of the market.
- In the process to transfer members’ debts from loan sharks to NYSAC, we encountered some obstacles. For example, the loan sharks refused to come to meeting with the coop for the negotiation so CPD officials and NYSAC’s manager together with members tried to arrange a meeting at their places and tried to negotiate for debt reduction as much as possible for the benefit of members.
- Home bookkeeping was not maintained because members and coop’s personnel assuming it had no benefit excusing their lack of time. CPD official and NYSAC’s management took any occasion available – monthly BoD meeting, weekly consultation visit, etc. – to explain its purposes and benefits, and suggested them to update the book before going to bed every night and even encouraged them to keep a small notebook at hand for record keeping.

D. Impact and Sustainability

10. What were the key benefits resulting from this initiative?

The PPS system has improved CPD’s promotion service delivery process by enabling inflow of information on cooperative’s needs and problems back to CPD’s office through cooperative’s strategic plan preparation so it was incorporated into CPD’s promotion plan as well as budget allocation. Through this system, our service delivery has been more effective because promotion officials could focus on issues, aspects that had more impacts on that cooperatives’ development. In addition, through the participation process for strategic plan preparation, the cooperative, its members, and management got to learn about their problems together, decided how they will solve their problems and who has to take which actions. For example, in the case of NYSAC, through many discussion and brainstorming sessions arranged by CPD’s officials, NYSAC reached the conclusion on their strategic plan to solve their member’s debts’ problems. The plan was laid out to attack the excessive debts first so reducing the outflow of money, then increasing their incomes and savings. More importantly, through that process, they also learned about the factors that hinders their members’ ability to follow through with the plan so that supporting measures were incorporated into the plan such as the fund for friends project to lend emergency money to members in shortage so they can meet due date, the farmers’ market organized by NYSAC to provide alternative distribution channel for members’ extra crops, and the artesian wells to help them reserve water supply for their extra crops during dry season. The initiative did respond to the needs of the poorest and vulnerable. It established measures to helps them get out of debts, it help improved their capacity to increase incomes so they started to see increased disposal incomes and savings. In addition, farmers’ housewives could play more actively roles in household financial decision making through their participation in home bookkeeping. So after the implementation of NYSAC’s strategic plan through the PPS system, farmers in the Nong Ya Sai district who had suffered poverty for many years could start to be relieved from excessive debts, increased incomes, more importantly disposal incomes, and savings.

11. Did the initiative improve integrity and/or accountability in public service? (If applicable)

- After the implementation of the PPS system, accountability in CPD’s promotion service had improved in many ways as follows:
o Improved integrity, reduced corruption – before PPS – no concrete service plan, - each person was assigned numbers of cooperatives in certain area of the province but there was no detailed action plan specifying which dates they will visit which cooperatives making it difficult for supervisor to monitor their work. Even more difficult for cooperatives to know their plan. The service was provided more spontaneously based on information surfaced or gathered from documentation, interview, or observation during each on-site visits. Consequently, service delivery lacked consistency over time because in some cases, certain issues may not be adequately followed through and no one could hold them responsible for that as the transparency of service delivery system was absent. In addition, there was no concrete measure to ensure promotion service was delivered in alignment with cooperative needs , meaning promotion official could spend more time than necessary at one cooperative instead of another for inappropriate reasons (comfortable, more accommodated, nearer, easier works, more acquainting with coop personnel, etc.) or treat them more favorably. After the implementation of the PPS system, the cooperative’s strategic plan is submitted to CPD’s provincial office and it will be incorporated into CPD promotion officer’s plan that can be used as promotion guideline for the officer and monitoring and performance evaluation of that officer for his supervisors.
o Improved accountability - no coop performance/ improvement was not much used as KPI so quality of service was not measured before. Growth or improvement of cooperatives had little correlation with quality of service delivery. For example, equal amount of resources provided and similar advices to cooperatives.

12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)

- Members of the cooperative were dominantly head of the households; the roles and needs of other members of the family - the housewives and children – were assumed to be represented by the voices of the members thus less emphasized or generally ignored.
- With the PPS, home bookkeeping was promoted. This activity - predominant by cooperative housewives/ emphasized on housewives roles/participation – allowing members’ housewives to more actively engaged in household financial decision making.
- PPS did definitely improve the situation of the poor – in this case, poor farmer organization and also poor farmers –
o Poor farmer organization/ cooperative – it allowed them reflect their needs back to CPD promotion official and incorporated in the official promotion plan so the monitoring could be done against the coop strategic plan at many levels – CPD provincial director, promotion officer, and the cooperative.
o Ensure coop maintain public welfare fund so it can be used for children’s education, health service for members, or welfare for old-aged members as well as scholarships for members’ kids.